The $375 million sale of One Federal St. in Boston is among the high-profile deals brokered by Trammell Crow this year.
In Boston’s commercial real estate world, Pedro Martinez has left the building. And he’s taken the rest of the “pitching” staff with him.
Last week’s resignation of Trammell Crow principal Robert E. Griffin Jr. was painful enough for his former company, but the impact on Trammell’s commercial sales dominance in the Bay State was greatly magnified by the defection of its entire Investment Services Group to rival Cushman & Wakefield. Joining the sales superstar in the move a few blocks down from Trammell’s 125 High St. headquarters were Griffin’s longtime colleagues, Marci B. Griffith and Edward Maher Jr, two top-tier brokers in their own right. The entire Middle Markets division also left, as did Trammell’s talented research sales analysts and marketing staff.
Before the sudden resignation, first unveiled last Thursday on Banker & Tradesman’s Web site, Trammell Crow was on pace to sell more than $1 billion of commercial real estate in New England for the third year in a row. The sales team had already handled the $375 million disposition of Boston’s One Federal St., a Financial District record. It also brokered the $213 million acquisition of 99 High St. by Chicago-based Walton Street Capital, as well as the $163 million sale of the Arsenal on the Charles in Watertown, a 770,000-square-foot mixed-use complex purchased by Harvard University.
Trammell Crow principal Robert DeLaney acknowledged that the departure will require a ground-up reconstruction of the company’s investment sales capabilities. But while saying he “wouldn’t characterize it as good news,” DeLaney said he is confident the company will be able to recruit new talent into the fold.
“Our job is clear,” he said. “We have to rebuild and we will.” That effort will begin immediately, DeLaney stressed.
“It’s going to be a big challenge [for Trammell] going ahead,” said a broker at another Boston real estate services company. “That’s a huge loss for them.”
Griffin told Banker & Tradesman he has “mixed emotions” about leaving the firm where he has worked the past eight years. While stressing his respect for Crow and its remaining staff, he said the relocation to Cushman & Wakefield is “a great opportunity” for him and his sales team. It is also a homecoming of sorts, given that Griffin worked at Cushman & Wakefield for nearly three years until 1993 when he joined Trammell Crow’s predecessor, Fallon Hines & O’Connor. Griffin said he had been mulling a switch for some time, and had spoken with a few other suitors before making his decision.
“I’m looking forward to it,” said Griffin, who begins his new position this week. “I have a lot of old friends there, and I just think [Cushman & Wakefield] is the place that makes the most sense for me to be right now.”
‘Great Coup’
Among other things, Griffin said he has a strong relationship with both Cushman Chief Executive Officer Arthur J. Mirante II and the firm’s national president, Bruce E. Mosler. The New York City headquarters of the company is another plus, he said, given the Big Apple’s position in the investment capital market.
“I think that will be very helpful for what we’re doing,” Griffin said. Calls to Mosler to discuss Griffin’s hiring were not returned.
Griffin declined to give details of his new role at the company. According to sources, however, he will be named president of Cushman & Wakefield’s New England operation, running it in partnership with the current regional leader, Thomas Collins. He would reportedly work on recruitment and overseeing investment sales activities, with Collins focusing on new business development. Cushman & Wakefield spokeswoman Victoria Goldberg declined comment on the situation, saying only that a press release will be issued shortly.
In any event, the action establishes Cushman & Wakefield as the premier commercial sales house in the region, enhancing the company’s national network and strong in-house leasing operation. It is also the second major departure from Trammell Crow this year, with four prominent leasing brokers leaving in June to form their own real estate services operation.
Broker Robert B. Richards called the situation “a great coup for Cushman & Wakefield.” Richards is one of the quartet of Crow brokers who left this year, launching Richards Barry Joyce & Partners.
“Rob and his group are among the most dominant sales teams in the country, and by attracting his team, I think Cushman & Wakefield is going to benefit greatly,” said Richards. “They are the best at what they do.”
Along with Griffin, Maher and Griffith, Middle Markets brokers Richard Herlihy and Christopher Griffin will relocate to 125 Summer St. Others include marketing specialist Michelle Sinclair and financial analysts Tyler Brown and Iain McGill. More than a dozen Trammell professionals will leave in all, sources estimated.
The recent resignations not only leave Trammell Crow in a more tenuous situation than when it began the year, it exposes the pitfalls of buying a company whose assets are primarily its people. Texas-based Crow paid an estimated $35 million for Fallon Hines & O’Connor in May 1998 in order to gain a foothold in Boston’s lucrative commercial real estate scene.
While there was a three-year clause that kept FH&O’s principals on board, many were surprised that Crow paid such a large sum without requiring a longer commitment from the staff. It now appears those concerns were warranted.
Other questions persist as well, including the fate of several hundred million dollars of real estate sales that Crow’s brokers were in the middle of negotiating. The firm, for example, was marketing 360 Newbury St. – the new home of Virgin Atlantic Records – as well as 18 Tremont St., a popular office building near Boston’s Government Center. Sources said upward of $300 million may have been in the sales pipeline when the resignations occurred. DeLaney said the company will meet with Griffin to determine how best to handle those deals in progress.
Another issue emanating from the arrival of the Trammell Crow team is the future of the existing investment specialists already at Cushman & Wakefield. Griffin would not discuss that matter except to say all are welcome to remain on board.
